Our very own RD approach exploits these types of discontinuities regarding probability of therapy. This provides you with a sufficiently great number of observations alongside business lending thresholds. If you are people can fundamentally boost their credit ratings because of quick borrowing from the bank installment and you may accumulating a track record of borrowing from the bank utilize, users lack sufficient advice so you can correctly shape its ratings as much as financial thresholds, a switch assumption for identity.
Our “treatment” variable interesting receives a payday loan. But not, applicants refuted because of the lowest credit rating during the that lender can be then recognized during the some other bank, plus the likelihood of applying to some other lender is highly endogenous to your decision in the basic bank.